JOB EVALUATION: METHODS, ADVANTAGES, DISADVANTAGES, EXAMPLES - JOB - 2025

The valuation of positions, also called valuation or evaluation of jobs, is a systematic process whose objective is to evaluate and determine the value of the work performed within an organization. It is usually done individually.

That is, they are carried out by evaluating the work of each worker in the company, in order to determine the salaries associated with each task. This term should not be confused with job analysis, which is a system that gathers information about different jobs.

However, the job evaluation requires at least a minimum previous job analysis to be able to proceed with its evaluation. Generally, four methods are known to carry out this valuation: the ranking or ordering method, the classification method, the point-by-factor method, and the comparison method by factor.

Methods and examples

Ranking or sort method

This method is the simplest and easiest to execute. Basically, it is about comparing the different jobs in order to order them according to their importance.

The importance of each task is measured by the amount of work, the responsibility it entails, and the skill required by the worker who performs it.

Application mode

1- In the first place, the jobs are analyzed, taking into account the characteristics necessary for later comparison.

2- The reference works (from 10 to 20) are identified. The idea is to facilitate the ordering of tasks. These reference works can be the most important and the least important, some intermediate works, etc.

3- All the works are placed around the reference posts.

4- All positions are divided into groups considering the important work factors; that is, they have similar responsibilities, skills, and workload. Thus, salaries will be assigned to the different groups.

Advantage

- It is the simplest method.

- It is very economical to start up.

- It consumes little time and bureaucracy.

Disadvantages

- There are no defined standards for the judgment of the different positions; therefore, there is no way to measure the differences between these.

- It can work in small organizations; however, as the size of the business increases, it becomes increasingly unmanageable.

Example

Reference positions in a small business could be:

1- Executive director.

2- Plant manager.

3- Operator.

Therefore, the posts would be placed between those three benchmarks. For example, a department manager would be between the CEO and the plant manager, while an employee would be between the plant manager and the operator. In this way, a hierarchical order would be achieved.

Classification method

This method is based on dividing the jobs into different classes or grades, designated by a competent authority in charge of this function.

These classes are differentiated by identifying common factors in the jobs; for example, skills, knowledge or responsibilities. This is possible through a prior analysis of the different positions and their tasks.

Advantage

- It is a simple and clear method.

- It is economical and therefore perfect for small organizations.

- The classifications facilitate the problems of determining a certain salary.

Disadvantages

- It can be a biased method on the part of the members of the committee in charge of the classification.

- You cannot deal with some very complex jobs only to fit them into one of the classifications.

- It oversimplifies some big differences between positions.

Example

An example of these classes could be the following:

1- Executives: here would enter the high positions.

2- Experts: they could be department managers.

3- Semi-experts: employees of each department with middle positions, operators, etc.

4- Inexperienced: interns, cleaning assistants, etc.

Factor comparison method

What this system does is divide the jobs into different factors necessary for their proper performance.

These factors can be the degree of responsibility, knowledge, dangerousness, skill, etc., necessary to carry out the specific work that is being evaluated.

Once you have the factors, they are graded according to their importance. In this way, a hierarchical order of the positions is made based on the factors that are needed, and with this the salaries are assigned.

This method is more exact and equitable than the previous ones, since it better measures the relative importance of the different jobs.

However, it is improved when rankings are scored in what we call the factor point method, which will be explained later.

Advantage

- It is possible to use it in a large number of jobs and industries.

- It is more fair and equitable, since it sees the individual factors of each position.

- The value of the position is expressed in monetary value, which helps organizations to measure salaries efficiently.

Disadvantages

- Decision-makers are needed to assign rankings to the factors, which can cause one or other factors to be classified subjectively. That is, a decision maker may think that knowledge is more important than responsibility, and assign it a higher ranking.

- The salary that is assigned may be biased and negatively affect minority groups.

Example

Within positions, three important factors could be responsibility, skill, and effort. In this way, out of 10 points, for an operator position the following ranking could be given:

- Responsibility: 3

- Skill: 2

- Effort: 4

Total: 9

Instead, for a manager position the graduation could be:

- Responsibility: 7

- Skill: 5

- Effort: 3

Total: 15

In this way, a hierarchy of the different positions would be generated.

Points method by factors

This is the most common method for evaluating different jobs. In this system, jobs are broken down into several identifiable factors, as in the factor comparison method. In turn, these factors are normally decomposed into several sub-factors.

Subsequently, points are assigned to each of these factors based on the importance they have within each job position. This score is assigned by a committee in charge of it.

Application mode

1- Select the works to be evaluated.

2- Decide the factors that will be taken into account to evaluate the positions (ability, responsibility, knowledge, etc.) and define them in writing. This is important so that all evaluators know exactly what each factor refers to and have the same idea of ​​all.

3- Designate subfactors within each factor.

4- Assign a percentage to each factor (out of 100) and to their respective subfactors.

5- Give a score to the subfactors, which will be multiplied by their percentages. This score serves to facilitate calculations, so it is not important how many you decide to assign. However, they should be round.

6- Add the scores for each factor.

7- Salaries are defined based on an arithmetic formula.

Advantage

- It is the most complete and equitable method.

- It serves a large number of positions and industries.

- The value of the position is expressed in monetary value, which helps organizations to measure salaries efficiently.

Disadvantages

- The percentages can be somewhat subjective.

- It is more expensive to carry out.

- The salary that is assigned may be biased and negatively affect minority groups.

Example

In the example above, the factors would be divided into sub-factors. In the case of liability:

Responsibility:

- Supervision.

- Materials.

- Confidential information.

Each of these is assigned a percentage (both to the factor and its sub-factors, which will be multiplied), and this is multiplied by a score (in this case, 1000 points).

Responsibility: 40%

- Supervision: 40% (* 40% = 16%). 16% * 1000 = 160

- Materials: 30% (* 40% = 12%) 12% * 1000 = 120

- Confidential information: 30% (* 40% = 12%) 12% * 1000 = 120

Taking these scores, the grades are assigned and a score is assigned to them (the maximum must be the total score that has come before, and the minimum 10% of it). In the case of supervision, they could be:

- Responsible only for their work: 10% * 160 = 16

- Manage one or two people: 80

- Manage more than two people: 160

Thus, salaries would be calculated based on the total scores for each position.

References

1. Job grading factors. (sf). gradar.com. Obtained from gradar.com.
2. Academy. (sf). academia.edu. Retrieved from academia.edu
3. International Position Evaluation System (IPE). (sf). imercer.com. Obtained from imercer.com.
4. Chiavenato, Idalberto (2008). Human talent management. Spain: Mc Graw Hill.
5. Dessler, Gary (2009). Staff Administration. Mexico: Prentice Hall.